Need for Video Compression: The high bit rates that result from the various types of digital video make their transmission through their intended channels very difficult. Even entertainment video along with modest frame rates and dimensions would need bandwidth and storage space far in excess of which available on the CD-ROM. Hence, delivering consumer quality video on compact disc would be not possible.

Likewise, the data transfer rate needed by a video telephony system is far greater than the bandwidth obtainable over the plain old telephone system that is POTS. Still if high bandwidth technology for example: fiber-optic cable was in place, byte cost on each of transmission would have to be extremely low before this is feasible to utilize for the staggering amounts of data needed by HDTV.

Finally, even though the storage and transportation issues of digital video were overcome, the processing power required to manage such volumes of data would create the receiver hardware more optimized.

Although important gains in storage, processor and transmission technology have been attained in current years, this is primarily the reduction of the amount of data that requires to be stored, transmitted and processed, which has made widespread utilize of digital video a possibility.

Such reduction of bandwidth has been made probable through advances in compression technology.